SOMERSET — The town will be unable to pay its bills within a matter of weeks, about $17 million will need to be borrowed to get through April 30 and there's strong debate among officials over the borrowing process.

All of that is happening as the town struggles to balance its finances in order to set its tax rate and send out tax bills that are almost a month late.

In order to receive state Department of Revenue certification in time to receive two quarters of tax revenue totaling an estimated $22.8 million by May 1, the town's finance director said Treasurer Kathleen Trafka must submit seven months of unreconciled cash accounts by early March.

At Wednesday night's Board of Selectmen meeting, Trafka for the first time agreed to accept professional financial consulting help in her office, but her answer to Chairman Donald Setter's question on when she could complete the needed tasks stunned officials.

On a scale of one to 10, with 10 being the most likely, Setters asked the first-term elected treasurer how likely it was she could reconcile her cash receipts from December 2012 through June 30, 2013, which is the end of fiscal 2013.

"I would say a 9.5," Trafka said during a 40-minute discussion that began with many uncertainties and concluded with all three selectmen describing a town in dire straights.

"This lady is taking our town down," Setters charged after the meeting. "We have to do whatever is necessary to get these books reconciled. It may be too late now."

"Right now we are in a crisis mode. We've got to get our tax rate certified," Selectman Scott Lebeau said.

"The only way it's going to happen is if we can get the cash reconciled on or about mid-March," Joseph Bolton, veteran town accountant and finance director, said of sending out tax bills by April 1 to be paid by May 1.

Town Administrator Dennis Luttrell said Trafka told selectmen publicly in mid-December that the fiscal year's cash receipts would be reconciled through June 30 in two weeks.

"I don't think we're a month closer, a day closer, than we were in December," Luttrell said after the lengthy discussion and shortly after Trafka and Assistant Treasurer Christine Marum left the meeting.

After saying a lot of her time needs to be spent "on tedious tasks" — Marum adding that nearly all of Trafka's job pertains to insurance claims — the treasurer made this statement:

"I'm saying I will do the best I can. Do you want my first-born child?" Trafka said.

At another juncture, Lebeau reminded her she needs to balance seven months of unreconciled books and submit them to the town accountant before the DOR can be asked to certify the tax rate.

"I keep hearing two weeks, and it's been eight weeks and we're still working on November," said Lebeau, who became agitated at several points in the meeting.

Page 2 of 3 - "I'm just telling you I'm working as hard as I can with the tools that I have," Trafka said.

Listed on the agenda to "discuss and approve the borrowing process," the only information the treasurer passed out pertained to the amount of funds the town has in its stabilization account.

That amount is $6,962,963. It reflects significant proceeds in the rainy-day fund to offset rapidly decreasing revenues from the Brayton Point power plant.

"My understanding is we have to spend the stabilization amount before we go out and borrow. I'm not sure how to proceed from here," Trafka, who is responsible for borrowing and cash reconciliation, said at the outset.

She emphasized that Peter Frazier of First Southwest Corp., the town's banking consultant, assured her the borrowing could be "a fast turn-around," within a few days.

While Trafka did not list the borrowing amount on a DOR report selectmen needed to approve, she said the DOR would expect the greater amount to be borrowed initially from the stabilization fund, from "free cash" of surplus receipts or 1 percent of the $43.5 million tax levy, which is less than $500,000. (There's no free cash because it can't be certified without the reconciled balance sheets.)

The borrowing from the stabilization fund would be paid back into that fund after tax revenue is collected from residential and commercial taxpayers. The 2 percent to 3 percent interest that fund has been collecting would be lost if the nearly $7 million in stabilization were borrowed.

"This would need to be done in the next two weeks," Trafka told selectmen.

Town Counsel Clement Brown asserted that when borrowing to pay bills, the town needs to report the amount of stabilization receipts, but the law "says nothing that you have to spend it."

Brown also said the stabilization funds could not be spent without a Town Meeting vote.

Bolton said he's spoken with DOR and that while there may not be a state statute requiring expending all or part of the stabilization funds, "I believe it's in the (state) regulations" to borrow those funds first.

Bolton said he planned to verify that information today.

Luttrell, at selectmen's direction, said he'd contact the town Advisory and Finance Committee chairman today in order to set up a meeting with that board. Selectmen hope to gain support from that board to use nearly $100,000 from the Advisory and Finance Committee's reserve fund to hire a fiscal consultant for several months to help the treasurer's office and the town.

According to balance sheets Lebeau said Trafka provided him on Tuesday, the town averages $5.5 million a month in expenses, would be short $120,000 by the end of February if it borrowed from its $7 million stabilization account and included $1.5 million in excise tax revenues from bills going out in the next few days.

Page 3 of 3 - By the end of March, the deficit would be $4.4 million and by the end of April, $9.6 million without additional borrowing, Lebeau said of the records he said Trafka gave him.

Bolton said if the funds the town needs to borrow are not repaid by June 30, the DOR would take issue.

Setters, noting Trafka was an elected official, asked about her allowing the board to hire a consultant to work in her office and reconcile cash receipts. That proposal was made at the fall special Town Meeting, and Trafka spoke out against it.

"I'm always willing to accept help," Trafka said Wednesday night. She said if she'd had the clerical help she needed, and not been without an assistant treasurer for six weeks, this fiscal crisis would not have occurred.

"We're going to get somebody in there regardless," 12-year Selectman Patrick O'Neil said. He asked Luttrell about putting more staff in her office.

When Trafka later said they could close the treasurer's office to the public some days to work on balancing seven months of accounts, O'Neil said, "I think the only thing you should be doing is reconciling free cash.

"When a boat is sinking," Lebeau said, "you handle the things that have to be done. We have enough money to keep the town afloat for the next six weeks."